Most successful businesses know how to treat their faithful customers. A good restaurant owner will treat regulars with a complimentary drink or appetizer. Department stores send out coupons to returning customers. Supermarkets offer customer loyalty cards and often the more you spend, the more you are rewarded in savings. Even car dealers offer discounts to repeat buyers.

It stands to reason that insurance companies would offer some type of loyalty discounts to their customers as well. After all, many keep using the same company for their home and/or auto insurance for years and years. You would think these dutiful customers would be rewarded for their loyalty.

It just so happens that the opposite is true!

A few years ago, I was looking at my bills and noticed how expensive my insurance rates were. I remembered that when I first purchased the policy from my carrier in 2003, my rates were very reasonable, and competitive for the time. My rates had steadily increased after years of accident-free driving. I always assumed that it was due to inflation and the increased operational costs of the insurance company being passed on to me.

Last year, I finally decided to shop around for a new insurance company. I was amazed when a reputable company offered me a policy of equal coverage at a rate that was half of what I was paying with my old company – the one I had been loyal to for ten years. While I was thrilled to get such a great rate, I wanted to know why my prior company was charging me so much, why my rate was no longer competitive. As I mentioned I am a safe driver, and never even so much as had a traffic ticket. So I did a little research and was shocked at what I discovered.

It turns out most large insurance companies employ a tactic known as price optimization. Insurance companies have learned through research that most consumers will accept a modest yearly price increase without balking. This means that year after year, a carrier will raise the rates of its existing customers slightly for know other reason then that they can get away with it.

These modest increases can really add up over time. If you’ve been using the same insurance carrier for several years, you may be paying substantially more for your insurance then a new client of that same company.

It’s unfortunate that in today’s busy world we always have to be shopping around for the best price on our insurance. With their commercials and slogans, insurance companies would have you believe that they’ve got your back, but when it comes to money, they’re apparently out there trying to figure out how to get more of yours.

Most of us are already aware of credit card companies and banks adding unnecessary fees. Now we can add insurance companies to the list of disreputable corporations.

The moral of the story is that you should never get complacent with your insurance carrier. If you do, it will cost you. The good news is that there is a whole market out there and lots of competition between insurance carriers for your business. Price shopping insurance rates will most often save you money.